Financial managers are responsible for the financial health of an organization. They create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.

Duties

Financial managers typically do the following:

  • Prepare financial statements, business activity reports, and forecasts
  • Monitor financial details to ensure that legal requirements are met
  • Supervise employees who do financial reporting and budgeting
  • Review financial reports and seek ways to reduce costs
  • Analyze market trends to maximize profits and find expansion opportunities
  • Help management make financial decisions

Financial managers spend much of their time analyzing data and advising senior managers on ways to maximize profits. They often work on teams, acting as advisors to top executives.

Financial managers must have knowledge of the topics, tax laws, and regulations that are specific to their organization or industry. For example, government financial managers must be experts on appropriations and budgeting processes; healthcare financial managers must understand billing, reimbursement, and other business matters related to healthcare.

The following are examples of types of financial managers:

Controllers direct the preparation of financial reports that summarize and forecast an organization’s financial position. These reports may include income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments of their organization.

Treasurers and finance officers direct an organization’s budgets to meet its financial goals. They oversee investments and other plans to raise capital, such as issuing stocks or bonds, to support their organization’s growth. They also develop financial plans for mergers (two companies joining together) and acquisitions (one company buying another).

Credit managers oversee an organization’s credit business. They set credit-rating standards, determine credit limits, and monitor the collections of past-due accounts.

Cash managers monitor and control the flow of money into and out of an organization to meet business and investment needs. For example, they must project whether the organization will have a shortage or surplus of cash.

Risk managers use strategies to limit or offset an organization’s chance of financial loss or exposure to financial uncertainty. Among the risks they try to limit are those arising from currency or commodity price changes.

Insurance managers decide how to limit an organization’s losses by protecting against risks, such as for disability payments to an employee who gets hurt on the job or for costs imposed by a lawsuit against the organization.

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Work Environment

Financial managers held about 653,600 jobs in 2018. The largest employers of financial managers were as follows:

Finance and insurance 30%
Professional, scientific, and technical services 14
Management of companies and enterprises 11
Manufacturing 7
Government 6

Financial managers work closely with top executives and with departments that develop data needed for analysis.

Work Schedules

Most financial managers work full time, and some work more than 40 hours per week.

Education and Training

inancial managers typically need a bachelor’s degree and 5 years or more of experience in another business or financial occupation, such as an accountant, securities sales agent, or financial analyst.

Education

Financial managers typically need at least a bachelor's degree in finance, accounting, economics, or business administration. However, many employers prefer to hire candidates who have a master’s degree in those same fields. These disciplines help students learn analytical skills and methods.

Licenses, Certifications, and Registrations

Although it is not required, professional certification indicates competence for financial managers who have it. The CFA Institute confers the Chartered Financial Analyst (CFA) certification to investment professionals who have at least a bachelor’s degree or 4 years of work experience, or a combination of experience and education, and who pass three exams. The Association for Financial Professionalsconfers the Certified Treasury Professional (CTP) credential to those who have at least 2 years of relevant experience or 1 year of experience and a graduate degree in business, finance, or a related field. This association also confers the Certified Corporate Financial Planning Analysis Professional (FP&A) credential to those who have a bachelor’s degree or who are currently enrolled in an undergraduate program with a finance-related major and will graduate within 2 years. Both credentials require passing an exam.

Certified public accountants (CPAs) are licensed by their state’s board of accountancy and must pass an exam administered by the American Institute of Certified Public Accountants (AICPA).

Work Experience in a Related Occupation

Financial managers usually have experience in another business or financial occupation. For example, they may have worked as a loan officer, accountant, securities sales agent, or financial analyst.

In some cases, companies provide management training to help prepare motivated, skilled financial workers to become managers.

Advancement

Experienced financial managers may advance to become chief financial officers (CFOs). These executives are responsible for the accuracy of an organization’s financial reporting.

Personality and Interests

Financial managers typically have an interest in the Persuading and Organizing interest areas, according to the Holland Code framework. The Persuading interest area indicates a focus on influencing, motivating, and selling to other people. The Organizing interest area indicates a focus on working with information and processes to keep things arranged in orderly systems.

If you are not sure whether you have a Persuading or Organizing interest which might fit with a career as a financial manager, you can take a career test to measure your interests.

Financial managers should also possess the following specific qualities:

Analytical skills. Financial managers increasingly are assisting executives in making decisions that affect their organization, a task for which these managers need analytical ability.

Communication skills. Excellent communication skills are essential because financial managers must explain and justify complex financial transactions.

Detail oriented. In preparing and analyzing reports such as balance sheets and income statements, financial managers must pay attention to detail.

Math skills. Financial managers must be skilled in math, including algebra. An understanding of international finance and complex financial documents also is important.

Organizational skills. Financial managers deal with a range of information and documents and so must stay organized to do their jobs effectively.

Pay

The median annual wage for financial managers was $129,890 in May 2019. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $68,370, and the highest 10 percent earned more than $208,000.

In May 2019, the median annual wages for financial managers in the top industries in which they worked were as follows:

Professional, scientific, and technical services $152,810
Management of companies and enterprises 145,280
Manufacturing 130,900
Finance and insurance 125,600
Government 114,250

Most financial managers work full time, and some work more than 40 hours per week.

Job Outlook

Employment of financial managers is projected to grow 16 percent from 2018 to 2028, much faster than the average for all occupations. However, growth will vary by industry.

Services provided by financial managers, such as planning, directing, and coordinating investments, are likely to stay in demand as the economy grows. In addition, several specialties within financial management, particularly cash management and risk management, are expected to be in high demand over the decade.

In recent years, companies have accumulated more cash on their balance sheets, particularly among those with operations in foreign countries. As globalization continues, this trend is likely to persist. This should lead to demand for financial managers, as companies will need expertise in managing cash.

There has been an increased emphasis on risk management within the financial industry, and this trend is expected to continue. Banking institutions are expected to emphasize stability and managing risk over profits. This is expected to lead to employment growth for risk managers.

The credit intermediation and related activities industry (which includes commercial and savings banks) employs a large percentage of financial managers. As bank customers continue to conduct transactions online, the number of bank branches is expected to decline, which should limit employment growth in this sector. However, employment declines are expected to mainly affect clerical occupations, such as tellers, rather than financial managers. From 2018 to 2028, employment of financial managers is projected to grow 13 percent in this industry.

Job Prospects

About 64,900 openings for financial managers are projected each year, on average, over the decade.

Many of those openings are expected to result from the need to replace workers who exit the labor force, such as to retire, and from the need to replace workers who transfer to different occupations.

Candidates with expertise in accounting and finance—particularly those with a master's degree or certification—should have the best job prospects.

For More Information

For more information about financial managers, including certification, visit

Global Academy of Finance and Management

For information about the Certified Treasury Professional and the Financial Planning and Analysis Professional designations, visit

Association for Financial Professionals

For information about the Chartered Financial Analyst program, visit

CFA Institute

For more information about the certified public accountant designation, visit

American Institute of Certified Public Accountants (AICPA)

 

CareerOneStop

For a career video on financial managers, visit

Financial Managers, Branch or Department

For a career video on treasurers and controllers, visit

Treasurers and Controllers

FAQ

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The career information above is taken from the Bureau of Labor Statistics Occupational Outlook Handbook. This excellent resource for occupational data is published by the U.S. Department of Labor every two years. Truity periodically updates our site with information from the BLS database.

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